B-172593, JUN 28, 1971, 50 COMP GEN 866

B-172593, JUN 28, 1971, 50 COMP GEN 866

BIDS - TWO-STEP PROCUREMENT - TECHNICAL PROPOSALS - DEFICIENCIES - MINOR DEVIATIONS THE MINOR REVISION OF AN UNPRICED TECHNICAL PROPOSAL, THE FIRST-STEP OF A TWO-STEP PROCUREMENT FOR A RETRIEVAL SYSTEM, THAT HAD INITIALLY BEEN FOUND UNACCEPTABLE WAS NOT PREJUDICIAL TO OTHER BIDDERS FOR THE GOVERNMENT UNDER THE PROCEDURE CONTEMPLATED BY PARAGRAPH 2-503.1 ASPR, IS FREE TO DISCUSS A SUBMITTED PROPOSAL WITH AN OFFEROR IF CLARIFICATION OR ADDITIONAL INFORMATION WILL BRING A PROPOSAL TO AN ACCEPTABLE STATUS SINCE THE TWO- STEP PROCEDURE EXTENDS THE BENEFITS OF ADVERTISING TO PROCUREMENTS PREVIOUSLY NEGOTIATED, AND WHILE THE SECOND STEP OF THE PROCEDURE IS CONDUCTED IN ACCORDANCE WITH FORMAL ADVERTISING, THE FIRST-STEP CONTEMPLATES MAXIMIZING COMPETITION. THEREFORE, THE LOW BIDDER ORIGINALLY INCORRECTLY PLACED IN THE UNACCEPTABLE CATEGORY, HAVING SUBMITTED AN ACCEPTABLE TECHNICAL PROPOSAL AND CONFIRMED THE EXTREMELY LOW PRICE BID MAY PROPERLY BE AWARDED A CONTRACT.

TO SI HANDLING SYSTEMS, INCORPORATED, JUNE 28, 1971:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 12, 1971, PROTESTING AGAINST THE AWARD OF A CONTRACT UNDER LETTER REQUEST FOR TECHNICAL PROPOSALS (STEP 1), ISSUED OCTOBER 7, 1970, AND INVITATION FOR BIDS NO. DAAG36-71-B-0038 (STEP 2), ISSUED FEBRUARY 10, 1971, BY THE DEPARTMENT OF THE ARMY, NEW CUMBERLAND ARMY DEPOT, HARRISBURG, PENNSYLVANIA.

STEP 1 WAS ISSUED OCTOBER 7, 1970, AND INVITED UNPRICED TECHNICAL PROPOSALS FOR SERVICES AND MATERIAL FOR THE MANUFACTURE AND OPERATIONAL INSTALLATION OF AN AUTOMATED BIN MATERIAL STORAGE/RETRIEVAL SYSTEM AT NEW CUMBERLAND ARMY DEPOT IN ACCORDANCE WITH PURCHASE DESCRIPTION SPECIFICATIONS. OF THE SIX TECHNICAL PROPOSALS RECEIVED, FOUR WERE FOUND TO BE "REASONABLY SUSCEPTIBLE OF BEING MADE ACCEPTABLE BY ADDITIONAL INFORMATION CLARIFYING OR SUPPLEMENTING, BUT NOT BASICALLY CHANGING THE PROPOSALS AS SUBMITTED" IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-503.1(E)(II). THE FOUR OFFERORS IN THE "REASONABLY SUSCEPTIBLE" CATEGORY WERE ADVISED BY TELEPHONE AND CONFIRMATORY LETTERS ON JANUARY 25, 1971, TO SUBMIT CLARIFICATIONS OF THEIR PROPOSALS BY JANUARY 29, 1971. ON FEBRUARY 2, 1971, THE COMMITTEE FOR REVIEW CONCLUDED THAT THESE FOUR PROPOSALS WERE ACCEPTABLE. THE TWO UNACCEPTABLE OFFERORS, PAGE AIRWAYS, INCORPORATED (PAI), AND MOBILITY SYSTEMS, INCORPORATED, WERE NOTIFIED OF THIS DETERMINATION BY LETTER DATED FEBRUARY 3, 1971.

THE RECORD FURTHER SHOWS THAT PAI, BY TELEGRAM DATED FEBRUARY 8, 1971, REQUESTED AN OPPORTUNITY TO DISCUSS THE REJECTION OF THEIR PROPOSAL. THE CONTRACTING OFFICER ADVISED PAI BY LETTER DATED FEBRUARY 11, 1971, THAT THEY COULD PRESENT A WRITTEN REBUTTAL TO THE REJECTION OF THEIR PROPOSAL TO DETERMINE IF A MEETING SHOULD BE HELD. MEANWHILE, STEP 2 WAS ISSUED ON FEBRUARY 10, 1971, TO THE FOUR "ACCEPTABLE" FIRMS, SPECIFYING A BID OPENING DATE OF MARCH 12, 1971. ON FEBRUARY 18, 1971, PAI SUBMITTED CLARIFYING TECHNICAL INFORMATION CONTENDING THEIR TECHNICAL PROPOSAL NEEDED ONLY MINOR REVISION TO BE CONSIDERED ACCEPTABLE. AFTER REVIEW OF THIS INFORMATION THE EVALUATION COMMITTEE DETERMINED THAT THE CLARIFICATIONS SUBMITTED WERE MINOR IN NATURE AND ON FEBRUARY 25, 1971, ADVISED PAI THAT A MEETING WOULD BE APPROPRIATE. ON FEBRUARY 26, 1971, A MEETING WAS HELD WITH PAI AT THE CONCLUSION OF WHICH IT WAS DETERMINED THAT THE GOVERNMENT HAD INAPPROPRIATELY REJECTED PAI'S TECHNICAL PROPOSAL BECAUSE THE INFORMATION SUBMITTED WAS SUFFICIENT TO DECLARE PAI'S TECHNICAL PROPOSAL AS ACCEPTABLE. THUS, ON FEBRUARY 26, 1971, AN INVITATION WAS ISSUED TO PAI AND THE BID OPENING DATE WAS EXTENDED BY AMENDMENT, TO MARCH 23, 1971. THE COMMERCE BUSINESS DAILY IN ISSUE PSA- 5268 DATED MARCH 4, 1971, PUBLICIZED THIS ACTION. ON MARCH 23, 1971, THE BID OPENING RESULTS SHOWED THE TWO LOWEST BIDDERS TO BE:

A. PAGE AIRWAYS, INC. - $689,745

B. SI HANDLING SYSTEMS, INC. - $1,361,591

IN VIEW OF THE WIDE VARIANCE IN PRICES BETWEEN THE LOW BIDDER AND THE OTHER BIDDERS, ON MARCH 24, 1971, THE CONTRACTING OFFICER IN ACCORDANCE WITH ASPR 2-406.3(E)(1)(I) REQUESTED VERIFICATION OF PAI'S BID AND REQUESTED REASSURANCE FROM THE EVALUATION COMMITTEE THAT THE PAI TECHNICAL PROPOSAL DID MEET THE REQUIREMENTS OF THE PURCHASE DESCRIPTION. AS A RESULT OF THE EVALUATION COMMITTEE'S REPLY, PAI WAS ADVISED ON APRIL 6, 1971, OF THE AREAS OF THE PURCHASE DESCRIPTION WHICH THE COMMITTEE FELT HAD THE GREATEST POTENTIAL FOR ERROR AND PAI WAS REQUESTED TO CONSIDER PARTICULARLY THESE AREAS IN VERIFICATION OF THEIR BID. BY LETTER DATED APRIL 12, 1971, PAI VERIFIED THEIR BID PRICE AS SUBMITTED AND STATED THAT THEY "ARE PREPARED TO STAND BY THEIR FIGURES AND SPECIFICATIONS AS OFFERED." THEREAFTER, A PREAWARD SURVEY BY DCASD, ROCHESTER, RECOMMENDED AWARD TO PAI.

YOU CONTEND THAT THE PAI PROPOSAL SHOULD NOT HAVE BEEN ACCEPTED SINCE INITIALLY ONLY FOUR BIDDERS WERE APPROVED TO BID UNDER STEP 2 AS PUBLISHED IN THE COMMERCE BUSINESS DAILY. YOU, ALSO, REQUEST CONFIRMATION THAT PAI IS OFFERING A SYSTEM WHICH FULLY COMPLIES WITH THE SPECIFICATION. IN THIS REGARD, YOU POINT OUT THAT THE OTHER BIDDERS ARE WITHIN 12 PERCENT OF EACH OTHER AND ARE "ALL CONSTANTLY ENGAGED IN THE MATERIAL HANDLING BUSINESS."

IT IS ADMINISTRATIVELY REPORTED THAT THE TECHNICAL COMMITTEE EVALUATED ALL TECHNICAL PROPOSALS IN ACCORDANCE WITH THE GOVERNMENT REQUIREMENTS AS SET FORTH IN THE PURCHASE DESCRIPTION. NO DEVIATION IN THE SPECIFICATION WAS PERMITTED. THE TECHNICAL REVIEW COMMITTEE COMPARED THE SYSTEM PROPOSED BY PAI WITH THOSE OF THE OTHER BIDDERS AND FOUND SEVERAL AREAS OF ENGINEERING INNOVATIONS IN THE PAI PROPOSAL WHICH NEVERTHELESS RESULT IN FULLY MEETING THE REQUIREMENTS OF THE PURCHASE DESCRIPTION BUT APPARENTLY PERMIT THE LOWER BID PRICE. CONCERNING COMPARABILITY, IT IS STATED THAT THIS CAN ONLY BE ANSWERED BY THE FACT THAT THE GOVERNMENT HAS DETERMINED THAT THE TECHNICAL PROPOSAL SUBMITTED BY PAI AS WELL AS THOSE OF THE OTHER BIDDERS MEET THE REQUIREMENTS OF THE PURCHASE DESCRIPTION.

AS YOU KNOW, AFTER SUBMISSION OF A PROPOSAL UNDER "STEP 1" OF A "TWO STEP PROCUREMENT," THE GOVERNMENT IS FREE TO DISCUSS A SUBMITTED PROPOSAL WITH THE OFFEROR IF CLARIFICATION OR ADDITIONAL INFORMATION COULD BRING THE PROPOSAL TO AN ACCEPTABLE STATUS. THIS IS IN ACCORDANCE WITH THE PROCEDURES SET OUT IN THE LETTER REQUEST FOR TECHNICAL PROPOSALS (STEP 1), AND IS CONTEMPLATED IN ASPR 2-503.1.

THE TWO-STEP PROCEDURE WAS INITIATED TO EXTEND THE BENEFITS OF ADVERTISING TO PROCUREMENTS WHICH PREVIOUSLY WERE NEGOTIATED. WHILE THE SECOND STEP OF THIS PROCEDURE IS CONDUCTED IN ACCORDANCE WITH THE RULES OF FORMAL ADVERTISING (ASPR 2-503.2), THE FIRST STEP, IN FURTHERANCE OF THE GOAL OF MAXIMIZED COMPETITION, CONTEMPLATES THE QUALIFICATION OF AS MANY SOURCES AS POSSIBLE WITHIN THE GIVEN TIME LIMITS. THE PURPOSE OF LIMITING THE CONSIDERATION TO A SPECIFIED TIME IS PRIMARILY FOR THE GOVERNMENT'S BENEFIT. 40 COMP. GEN. 35; ID. 40. IN THE INSTANT CASE, THE EVALUATION COMMITTEE ADVISED THE PROCUREMENT DIVISION ON FEBRUARY 26, 1971, REGARDING THE PAI TECHNICAL PROPOSAL THAT:

1. *** IT BECOMES INCREASINGLY APPARENT THAT THE ORIGINAL DECISION TO REJECT THEIR PROPOSAL WITHOUT DISCUSSION OR CLARIFICATION WAS INAPPROPRIATE. THOSE ITEMS ORIGINALLY DEEMED OBJECTIONABLE HAVE ALL BEEN RESOLVED. THE ORIGINAL PROPOSAL AS PRESENTED SHOULD HAVE QUALIFIED PAGE AIRWAYS FOR THE "REASONABLY ACCEPTABLE" CATEGORY. HOWEVER, THE MISINTERPRETATION OF THE SEVERITY OF THE DISCREPANCIES CONTAINED THEREIN LED US TO THE ORIGINAL REJECTION.

2. THOSE CLARIFICATIONS SUBMITTED WERE OF A MINOR SUPPLEMENTAL NATURE AND DID NOT COMPRISE A BASIC OR SUBSTANTIAL CHANGE TO THE ORIGINAL PROPOSAL.

3. UPON A FULL AND COMPREHENSIVE REVIEW OF THE CLARIFICATIONS SUBMITTED TOGETHER WITH THE BASIC TECHNICAL PROPOSAL, THERE IS NO DOUBT THAT PAGE AIRWAYS QUALIFIES FOR THE ACCEPTABLE CATEGORY. ***

WE CAN SEE NO PREJUDICE TO THE OTHER FOUR BIDDERS BY THE ACTION TAKEN IN REGARD TO THE PAI PROPOSAL. IN VIEW OF THE ABOVE, SHOWING THAT PAI WAS INCORRECTLY PLACED IN THE UNACCEPTABLE CATEGORY ORIGINALLY, WE WILL NOT OBJECT TO THE AWARD TO THE LOW BIDDER. SEE 43 COMP. GEN. 255 (1963).

ACCORDINGLY YOUR PROTEST IS DENIED.